In 1971, Republic Act No. (R.A.

) 6260 was enacted creating the Coconut Investment Company (CIC) to

administer the Coconut Investment Fund (CIF), which, under Section 8 thereof, was to be sourced from a
PhP 0.55 levy on the sale of every 100 kg. of copra. Of the PhP 0.55 levy of which the copra seller was, or
ought to be, issued COCOFUND receipts, PhP 0.02 was placed at the disposition of COCOFED, the national
association of coconut producers declared by the Philippine Coconut Administration (PHILCOA, now PCA) as
having the largest membership.

The declaration of martial law in September 1972 saw the issuance of several presidential decrees (“P.Ds.”)
purportedly designed to improve the coconut industry through the collection and use of the coconut levy
fund. While coming generally from impositions on the first sale of copra, the coconut levy fund came under
various names x x x. Charged with the duty of collecting and administering the Fund was PCA. Like
COCOFED with which it had a legal linkage, the PCA, by statutory provisions scattered in different coco levy
decrees, had its share of the coco levy.

The following were some of the issuances on the coco levy, its collection and utilization, how the proceeds of
the levy will be managed and by whom, and the purpose it was supposed to serve: Lawli bra ryofCRAlaw

1. P.D. No. 276 established the Coconut Consumers Stabilization Fund (CCSF) and declared the
proceeds of the CCSF levy as trust fund, to be utilized to subsidize the sale of coconut-based products, thus
stabilizing the price of edible oil.

2. P.D. No. 582 created the Coconut Industry Development Fund (CIDF) to finance the operation of a
hybrid coconut seed farm.

3. Then came P.D. No. 755 providing under its Section 1 the following: Lawlib raryofCR Alaw

It is hereby declared that the policy of the State is to provide readily available credit facilities to the coconut
farmers at a preferential rates; that this policy can be expeditiously and efficiently realized by the
implementation of the “Agreement for the Acquisition of a Commercial Bank for the benefit of Coconut
Farmers” executed by the [PCA] x x x; and that the [PCA] is hereby authorized to distribute, for free, the
shares of stock of the bank it acquired to the coconut farmers x x x.Towards achieving the policy thus
declared, P.D. No. 755, under its Section 2, authorized PCA to utilize the CCSF and the CIDF collections to
acquire a commercial bank and deposit the CCSF levy collections in said bank, interest free, the
deposit withdrawable only when the bank has attained a certain level of sufficiency in its equity capital. The
same section also decreed that all levies PCA is authorized to collect shall not be considered as special
and/or fiduciary funds or form part of the general funds of the government within the contemplation of P.D.
No. 711.

4. P.D. No. 961 codified the various laws relating to the development of coconut/palm oil industries.

5. The relevant provisions of P.D. No. 961, as later amended by P.D. No. 1468 (Revised Coconut Industry
Code), read: Lawlib raryofCRAlaw

ARTICLE III
Levies

Section 1. Coconut Consumers Stabilization Fund Levy. – The [PCA] is hereby empowered to impose and
collect x x x the Coconut Consumers Stabilization Fund Levy x x x.

xxxx

Section 5. Exemption. — The [CCSF] and the [CIDF] as well as all disbursements as herein authorized, shall
not be construed x x x as special and/or fiduciary funds, or as part of the general funds of the national
government within the contemplation of PD 711; x x x the intention being that said Fund and the
disbursements thereof as herein authorized for the benefit of the coconut farmers shall be owned by them in
their private capacities: x x x. (Emphasis supplied.)
6. Letter of Instructions No. (LOI) 926, Series of 1979, made reference to the creation, out of other
coco levy funds, of the Coconut Industry Investment Fund (CIIF) in P.D. No. 1468 and entrusted a
portion of the CIIF levy to UCPB for investment, on behalf of coconut farmers, in oil mills and
other private corporations, with the following equity ownership structure:

Section 2. Organization of the Cooperative Endeavor. – The [UCPB], in its capacity as the investment arm of
the coconut farmers thru the [CIIF] x x x is hereby directed to invest, on behalf of the coconut farmers, such
portion of the CIIF x x x in private corporations x x x under the following guidelines: La wlibra ryofCRAlaw

a) The coconut farmers shall own or control at least x x x (50%) of the outstanding voting capital
stock of the private corporation [acquired] thru the CIIF and/or corporation owned or controlled by the
farmers thru the CIIF x x x. (Words in bracket added.)
Through the years, a part of the coconut levy funds went directly or indirectly to [finance] various projects
and/or was converted into different assets or investments. Of particular relevance to this case was their use
to acquire the First United Bank (FUB), later renamed UCPB, and the acquisition by UCPB, through the
CIIF companies, of a large block of SMC shares.

xxx

Shortly after the execution of the PCA-Cojuangco, Jr. Agreement, President Marcos issued, on July 29, 1975,
P.D. No. 755 directing, as earlier narrated, PCA to use the CCSF and CIDF to acquire a commercial bank to
provide coco farmers with “readily available credit facilities at preferential rate,” and PCA “to distribute, for
free,” the bank shares to coconut farmers.

Then came the 1986 EDSA event. One of the priorities of then President Corazon C. Aquino’s revolutionary
government was the recovery of ill-gotten wealth reportedly amassed by the Marcos family and close
relatives, their nominees and associates. Apropos thereto, she issued Executive Order Nos. (E.Os.) 1, 2 and
14, as amended by E.O. 14-A, all Series of 1986. E.O. 1 created the PCGG and provided it with the tools and
processes it may avail of in the recovery efforts; E.O. No. 2 asserted that the ill-gotten assets and properties
come in the form of shares of stocks, etc.; while E.O. No. 14 conferred on the Sandiganbayan exclusive and
original jurisdiction over ill-gotten wealth cases, with the proviso that “technical rules of procedure and
evidence shall not be applied strictly” to the civil cases filed under the E.O. Pursuant to these issuances, the
PCGG issued numerous orders of sequestration, among which were those handed out, as earlier
mentioned, against shares of stock in UCPB purportedly owned by or registered in the names
of (a) more than a million coconut farmers and (b) the CIIF companies, including the SMC shares held
by the CIIF companies. On July 31, 1987, the PCGG instituted before the Sandiganbayan a recovery suit
docketed thereat as CC No. 0033.

After the filing and subsequent amendments of the complaint in CC 0033, Lobregat, COCOFED, et al., and
Ballares, et al., purportedly representing over a million coconut farmers, sought and were allowed to
intervene. Meanwhile, the following incidents/events transpired: Lawlib raryofCR Alaw

1. On the postulate, inter alia, that its coco-farmer members own at least 51% of the outstanding capital
stock of UCPB, the CIIF companies, etc., COCOFED, et al., on November 29, 1989, filed Class Action
Omnibus Motion praying for the lifting of the orders of sequestration referred to above and for a chance to
present evidence to prove the coconut farmers’ ownership of the UCPB and CIIF shares. The plea to present
evidence was denied;

2. Later, the Republic moved for and secured approval of a motion for separate trial which paved the way
for the subdivision of the causes of action in CC 0033, each detailing how the assets subject thereof were
acquired and the key roles the principal played;

3. Civil Case 0033, pursuant to an order of the Sandiganbayan would be subdivided into eight complaints,
docketed as CC 0033-A to CC 0033-H.
xxxx

4. On February 23, 2001, Lobregat, COCOFED, Ballares, et al., filed a Class Action Omnibus Motion to enjoin
the PCGG from voting the sequestered UCPB shares and the SMC shares registered in the names of the CIIF
companies. The Sandiganbayan, by Order of February 28, 2001, granted the motion, sending the Republic
to come to this Court on certiorari, docketed as G.R. Nos. 147062-64, to annul said order; and

5. By Decision of December 14, 2001, in G.R. Nos. 147062-64 (Republic v. COCOFED), the Court
declared the coco levy funds as prima facie public funds. And purchased as the sequestered UCPB
shares were by such funds, beneficial ownership thereon and the corollary voting rights prima
facie pertain, according to the Court, to the government.4 (Additional emphasis, italics and
underscoring supplied)
As mentioned in the above-cited case, the amended complaint in Civil Case No. 0033 revolved around the
provisional take-over by the PCGG of COCOFED, Cocomark, and Coconut Investment Company and their
assets and the sequestration of shares of stock in UCPB CIIF corporations (CIIF oil mills and the 14 CIIF
holding companies), or CIIF companies, so-called for having been either organized, acquired and/or funded
as UCPB subsidiaries with the use of the CIIF levy. The basic complaint also contained allegations about the
alleged misuse of the coconut levy funds to buy out the majority of the outstanding shares of stock of San
Miguel Corporation (SMC).5 redarclaw

The proceedings relevant to this case pertain to Civil Case No. 0033-A entitled, Republic of the Philippines,
Plaintiff, v. Eduardo M. Cojuangco, Jr., et al., Defendants, COCOFED, et al., BALLARES, et al., Class Action
Movants (Re: Anomalous Purchase and Use of [FUB] now [UCPB]), and Civil Case No. 0033-F entitled,
Republic of the Philippines, Plaintiff, v. Eduardo M. Cojuangco, Jr., et al., Defendants(Re: Acquisition of San
Miguel Corporation Shares of Stock).

The Sandiganbayan rendered partial summary judgments in Civil Case No. 0033-A and 0033-F on July 11,
2003 and May 7, 2004, respectively. In our Decision dated January 24, 2012 in COCOFED v. Republic,6 we
affirmed with modification the said partial summary judgments and also upheld the Sandiganbayan’s
ruling that the coconut levy funds are special public funds of the Government. Citing Republic v.
COCOFED7 which resolved the issue of whether the PCGG has the right to vote the sequestered
shares, we declared that the coconut levy funds are not only affected with public interest but are,
in fact, prima facie public funds. We also upheld the Sandiganbayan’s ruling that Sections 1 and 2 of
P.D. 755, Section 3, Article III of P.D. 961, and the implementing regulations of the PCA, are
unconstitutional “for allowing the use and/or the distribution of properties acquired through the
coconut levy funds to private individuals for their own direct benefit and absolute ownership.” As
to the ownership of the six CIIF companies, the 14 holding companies, and the CIIF block of SMC shares of
stock, we held these to be owned by the Government, having likewise been acquired using the coconut levy
funds. Accordingly, “the properties subject of the January 24, 2012 Decision were declared owned by and
ordered reconveyed to the Government, to be used only for the benefit of all coconut farmers and for the
development of the coconut industry.”8 redarclaw

Under the Resolution dated September 4, 2012, we denied with finality the motion for reconsideration filed
by the petitioners in G.R. Nos. 177857-58.

The dispositive portion of the September 4, 2012 Resolution in Philippine Coconut Producers Federation, Inc.
(COCOFED) v. Republic of the Philippines9 thus reads: Lawlib ra ryofCRAlaw

WHEREFORE, the Court resolves to DENY with FINALITY the instant Motion for Reconsideration dated
February 14, 2012 for lack of merit.

The Court further resolves to CLARIFY that the 753,848,312 SMC Series 1 preferred shares of the CIIF
companies converted from the CIIF block of SMC shares, with all the dividend earnings as well as all
increments arising from, but not limited to, the exercise of preemptive rights subject of the September 17,
2009 Resolution, shall now be the subject matter of the January 24, 2012 Decision and shall be declared
owned by the Government and be used only for the benefit of all coconut farmers and for the development
of the coconut industry.

As modified, the fallo of the January 24, 2012 Decision shall read, as follows: Lawlib raryofCR Alaw

WHEREFORE, the petitions in G.R. Nos. 177857-58 and 178793 are hereby DENIED. The Partial Summary
Judgment dated July 11, 2003 in Civil Case No. 0033-A as reiterated with modification in Resolution dated
June 5, 2007, as well as the Partial Summary Judgment dated May 7, 2004 in Civil Case No. 0033-F, which
was effectively amended in Resolution dated May 11, 2007, are AFFIRMED with MODIFICATION, only
with respect to those issues subject of the petitions in G.R. Nos. 177857-58 and 178193. However, the
issues raised in G.R. No. 180705 in relation to Partial Summary Judgment dated July 11, 2003 and
Resolution dated June 5, 2007 in Civil Case No. 0033-A, shall be decided by this Court in a separate
decision.

Civil Case No. 12-1251

UCPB alleged that the capital or equity used in establishing the CIIF companies was not exclusively sourced
from the coconut levy funds. It claimed that while P633 Million was invested by it as Administrator of the
CIIF, as universal bank it also invested around P112 million in the six oil mill companies or oil mills group
(CIIF OMG). As to the 14 holding companies, UCPB claimed that while it had the funds in mid-1983 to
purchase the 33,133,266 shares in SMC then being sold by the Soriano Group for the price of P1.656 Billion
to Mr. Eduardo M. Cojuangco, Jr., it could not, under banking laws, directly engage in the business of
brewery. To make the equity investment, the 14 holding companies were established by the CIIF OMG to
serve as corporate vehicles for the investment in SMC shares (CIIF SMC Block of Shares).

With the foregoing supposed equity in the CIIF companies and contributions to the acquisition of the SMC
shares, UCPB claims 11.03% indirect ownership valued at P7.84 Billion, based on the P71.04 Billion present
value of the said sequestered shares (P56.5 Billion redemption price of the redeemed shares plus P14.54
Billion dividends and accrued interests for the account of the 14 holding companies). UCPB thus prayed for
a judgment

declaring the rights and duties of [UCPB] affirming and confirming [UCPB’s] proportionate right, title and
interest in the Oil Mills Group Companies, its indirect equity of the 14 Coconut Industry Investment Funds
(“CIIF”) Holding Companies and the San Miguel Corporation (“SMC”) Shares, the dividends thereon and the
proceeds of the redemption thereof and that any disbursement or disposition thereof should x x x respect
and take into account [UCPB’s] right, title and interest thereto.13
PCGG filed a motion to dismiss citing the following grounds: (1) lack of jurisdiction over the
subject matter of the case; (2) the January 24, 2012 Decision of the Supreme Court cannot be
the proper subject of a petition for declaratory relief; (3) a petition for declaratory relief is
unavailing since the alleged right or interest of UCPB over the CIIF companies and the CIIF Block
of SMC Shares had long been breached or violated upon the issuance of the writ of sequestration
against the said companies and shares of stock by the PCGG, which thereafter assumed their
administration and voted the shares of stock; (4) UCPB is now estopped from asserting its
alleged right over the subject companies and shares of stock, having failed to enforce it for a
long time (25 years) from the date of filing by PCGG of the complaint in the Sandiganbayan in
1987 until the Supreme Court decided with finality the issue of ownership of the subject
sequestered companies and shares of stock on September 4, 2012; and (5) the petition is
defective, as it failed to implead an indispensable party, the Republic of the Philippines. 13-a redarclaw

UCPB opposed the motion contending that the subject of its petition is not the Supreme Court Decision
dated January 24, 2012 but the proper documents establishing UCPB’s ownership over the subject
companies and shares of stock. It further asserted that there is no actual breach of right or estoppel that
would bar UCPB’s claim considering that it was not even a party to any previous legal suit involving the
subject properties.13-b reda rclaw

On April 29, 2013, respondent Judge issued the first assailed Order denying the motion to dismiss and
directing the PCGG to file its Answer. PCGG’s motion for reconsideration was likewise denied under the
Order dated June 28, 2013.

Civil Case No. 12-1252

COCOLIFE raised similar claims of ownership in the subject companies and shares of stock by virtue of its
being a stockholder, owning 146,610,567 UCPB shares independently of its right as direct shareholder of the
CIIF OMG and the 14 holding companies, as well as the CIIF SMC Block of Shares. It alleged that on
December 18, 1985, it purchased from UCPB shares of stock in four CIIF oil companies. Using funds coming
from COCOLIFE and UCPB, the CIIF OMG was able to raise the money for the purchase of the 33,133,266
common shares in SMC. Consequently, COCOLIFE’s percentage ownership in the CIIF SMC Block of Shares
being held by the 14 holding companies is 11.01%. According to COCOLIFE, its investment in the CIIF OMG
is evidenced by certificates of stock issued by San Pablo Manufacturing Corp., Southern Luzon Coconut Oil
Mills, Granexport Manufacturing Corp. and Legaspi Oil Co., Inc.

Like UCPB, COCOLIFE asserted that the CIIF OMG and 14 CIIF holding companies are not wholly
owned by the Government. Since it was not impleaded in the complaint filed by the PCGG for the
recovery of allegedly ill-gotten properties (CIIF companies and CIIF SMC Block of Shares), COCOLIFE
argued that it should not be deprived of its proportionate interest (11.01%) in the said
properties sequestered by PCGG. It thus prayed that judgment be rendered by the RTC declaring the
rights and duties of COCOLIFE affirming and confirming COCOLIFE’s proportionate interest in the
four CIIF oil companies, its indirect equity in the 14 CIIF holding companies and the CIIF SMC
Block of Shares including the proceeds or their equivalent, and that any disbursement or disposition
thereof should preserve, respect and take into account COCOLIFE’s right and interest.

Civil Case No. 12-1252 was consolidated with Civil Case No. 12-1251. PCGG likewise moved to dismiss the
petition in Civil Case No. 12-1252 on the same grounds it raised in Civil Case No. 12-1251.

The Omnibus Order dated May 15, 2013 denied the motion to dismiss and further required PCGG to file its
Answer. PCGG’s motion for reconsideration was likewise denied by respondent Judge on December 4, 2013.

Petitioner’s Arguments

PCGG contends that respondent judge gravely abused his discretion in not dismissing the petitions for
declaratory relief, which merely aim to re-litigate the issue of ownership already passed upon by the
Sandiganbayan under the Partial Summary Judgment rendered in Civil Case No. 0033-F and the January 24,
2012 Decision of this Court in COCOFED v. Republic.14 It argues that the RTC has no jurisdiction over
the acts performed by PCGG pursuant to its quasi-judicial functions, particularly those relating to
the issuance of writs of sequestration, and that all cases involving ill-gotten wealth assets are
under the unquestionable jurisdiction of the Sandiganbayan.

Contrary to the asseveration of respondents UCPB and COCOLIFE, PCGG maintains that their petitions
for declaratory relief actually seek to modify or alter the Decision of this Court in COCOFED v.
Republic, which has become final and executory. PCGG also contends that documents like stock
certificates cannot be a proper subject of a petition for declaratory relief considering that the phrase “other
written instruments” contemplated by the Rules of Court pertains to a written document constituting a
contract upon which rights and obligations are created, which terms could be interpreted by the courts so as
to avoid any conflicting interests between the parties. Further, the alleged ownership or title of UCPB and
COCOLIFE have already been breached or violated by the issuance of writs of sequestration over the subject
properties.

On account of their inaction for more than 25 years that the issue of ownership over the sequestered CIIF
companies and CIIF SMC Block of Shares were being litigated, PCGG argues that UCPB and COCOLIFE are
now estopped from asserting any such right in the said properties. And as to their non-participation in the
cases before the Sandiganbayan, PCGG asserts it has no legal obligation to implead UCPB and COCOLIFE, as
held in Universal Broadcasting Corporation v. Sandiganbayan (5th Div.).15 redarclaw

Respondents’ Arguments

Respondents question the authority of Commissioner Vicente L. Gengos, Jr. in filing the present petitions
before the Court and signing the Verification and Certification Against Forum Shopping. They point out that
the PCGG is a collegial body created by virtue of EO 1, and it may function only as such
“Commission.” Consequently, the present action should have been properly authorized by all members of
the Commission.

On the issue of jurisdiction, UCPB and COCOLIFE argue that since they have properly alleged a case for
declaratory relief, jurisdiction over the subject matter lies in the regular courts such as the RTC of Makati
City. Having filed a motion to dismiss, PCGG is deemed to have admitted the material allegations of the
complaint, specifically that UCPB and COCOLIFE had jointly acquired the six CIIF oil mills by investing direct
equity of P112 Million (UCPB) and P112 Million (COCOLIFE) for the four CIIF oil mills. Citing San Miguel
Corporation v. Kahn16 where this Court held that the Sandiganbayan has no jurisdiction if the
subject matter of the case does not involve or has no relation to the recovery of ill-gotten wealth,
UCPB and COCOLIFE insist that the subject matter of their petitions is the declaration of their
rights under corporate documents, which in turn relate to UCPB and COCOLIFE’s investments not
sourced from the coconut levy funds. It is thus the allegations in the complaint that determine the
cause of action and what court has jurisdiction over such cause of action, and not the defenses raised in the
motion to dismiss and/or answer.

In the same vein, UCPB and COCOLIFE posit that, contrary to PCGG’s position, proceeding to hear the cases
below will not pave the way for re-examining the findings of this Court in its Decision in COCOFED v.
Republic. This is because the subject matter of the petitions for declaratory relief is not the
coconut levy funds but their own investments in the CIIF OMG and consequent indirect
ownership of the CIIF SMC Block of Shares. Neither do their petitions seek to lift the sequestration
orders as these pertain only to those shares in CIIF OMG which were acquired by UCPB as Administrator,
using coconut levy funds. While respondents adhere to the wisdom of the Decision in COCOFED v. Republic,
it is their position that the ruling therein does not affect their respective claims to 11% proportional equity
stake in the CIIF OMG companies. Moreover, since they were not impleaded in Sandiganbayan Civil
Case No. 0033-F and in G.R. Nos. 177857-58 and 178193, respondents maintain that they are not
bound by any adjudication of ownership rendered therein.

Respondents further contend that the writ of sequestration issued by the Sandiganbayan cannot be
considered a breach which gives rise to a cause of action in favor of any of the parties. There was no
“injury” on the part of UCPB and COCOLIFE despite the sequestration proceedings because they
were not impleaded as a party in the sequestration case. They point out that their title and interest in
the subject properties remained unaffected by the sequestration by PCGG considering that the CIIF
companies had not done anything to disown or deny UCPB and COCOLIFE’s stockholdings, as in fact, in their
Answer to the petition for declaratory relief, these companies expressly admitted the existence of
respondents’ stockholdings in each respective company. Also, the CIIF OMG were all in agreement that there
is a need for declaratory relief judgment on respondents’ claims in the sequestered properties
notwithstanding the final decision of this Court which resolved the issue of ownership in favor of the
Government.
On February 26, 2014 in G.R. No. 210901, we issued a temporary restraining order (TRO) immediately
enjoining the respondent judge, the RTC of Makati City, Branch 59, their representatives, agents or other
persons acting on their behalf, from proceeding with the hearing of the petitions for declaratory relief in Civil
Case Nos. 12-1251 and 12-1252.17 Likewise, a TRO was issued in G.R. No. 209447 enjoining the
respondent judge from further hearing the said petitions for declaratory relief.18 redarc law